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State Bank Corp. Reports Third Quarter Results

LAKE HAVASU CITY, Ariz., Oct. 24, 2014 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $612,000, or $0.10 per diluted share, for the quarter ended September 30, 2014, as compared to net income of $404,000, or $0.07 per diluted share, for the same period of 2013. For the nine months ended September 30, 2014, the Company reported net income of $4,879,000, or $0.83 per diluted share, as compared to a net income of $1,085,000, or $0.18 per diluted share, for the same period of 2013.

Third Quarter 2014 Highlights include:

  • Pre-tax operating income for the quarter was $947,000, an increase of 137 percent from the same period of 2013.
  • New portfolio loan production of $15.5 million during the quarter and $39.6 million for the year.
  • Core deposits increased $13.1 million.
  • Gains from the sale of loans (mortgage, SBA and USDA) totaled $510,000 in the third quarter, nearly double the amount in the same quarter last year.
  • Non-interest expense decreased by $449,000 in the third quarter 2014 compared to the same quarter 2013 as asset quality costs continued to moderate.

"This was another solid quarter. Our net interest income increased due to balance sheet growth. Gains from the sale of loans were sharply higher and we benefited from lower OREO expenses. We look forward to similar results in the fourth quarter to wrap up an excellent year," commented Brian M. Riley, President & CEO.

The Company provided $250,000 to its loan loss reserve during the third quarter of 2014 as total loans increased. Net credit recoveries during the third quarter of 2014 were $19,000 as compared to $62,000 in net credit losses for the same period of 2013.

Nonperforming assets were $17.2 million at September 30, 2014, a decrease of $6.2 million from $23.4 million at December 31, 2013. Nonperforming assets represented 5.43 percent of total assets at September 30, 2014 as compared to 8.15 percent at December 31, 2013. The Classified Asset Ratio fell to 56.8 percent at September 30, 2014 from 89.1 percent at December 31, 2013. The allowance for loan and lease losses totaled $3.2 million, or 1.57 percent of total loans, at September 30, 2014. The Company continues to carefully monitor its level of loss reserves and will proactively make additions as necessary to protect against an uncertain economic environment.

The Company's net interest margin continues to remain strong with third quarter results of 4.19 percent. The main components to this trend are low cost of funding and a better earning asset mix.

As of September 30, 2014, total assets were $317.6 million, an increase of $29.7 million, or 10.4 percent, from $287.9 million at December 31, 2013. Total loans were $202.4 million at September 30, 2014 as compared to $199.4 million at December 31, 2013. Total deposits were $276.7 million at September 30, 2014 as compared to $252.0 million at December 31, 2013.

Shareholder equity increased to $34.6 million at September 30, 2014 from $29.6 million at December 31, 2013. This resulted from core net operating income and a deferred income tax benefit. The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. The following table provides the Bank's capital ratio at September 30, 2014:

Ratio to be
Actual well
Ratio capitalized
Leverage Ratio 10.34% 5.00%
Tier 1 Capital to Risk-Weighted Assets 13.49% 6.00%
Total Capital to Risk-Weighted Assets 14.75% 10.00%

About the Company

State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of Mohave State Bank, the largest locally-owned bank in Mohave County. Mohave State Bank is a full-service bank providing deposit and loan products, and convenient on-line banking to individuals, businesses and professionals. The Bank was established in October 1991, and the holding company was formed in 2004. The Bank has six full-service branches: two in Lake Havasu City, two in Kingman, one in Bullhead City, and one in Yuma, Arizona. The Company is traded over-the-counter as SBAZ. For further information, please visit the web site: www.mohavestbank.com.

Forward-looking Statements

This press release may include forward-looking statements about State Bank Corp. and its subsidiary, Mohave State Bank, for which the Company claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Company's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, borrower capacity to repay, operational factors and competition in the geographic and business areas in which the Company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

UNAUDITED FINANCIAL STATEMENTS FOLLOW

State Bank Corp.
Five-Quarter Performance Summary
For the Quarter Ended
Dollars in thousands - Unaudited 9/30/2014 6/30/2014 3/31/2014 12/31/2013 9/30/2013
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income) $ 3,668 $ 3,286 $ 3,278 $ 3,221 $ 3,324
Net interest income $ 2,793 $ 2,720 $ 2,781 $ 2,653 $ 2,608
Provision for loan losses $ 250 $ 250 $ 120 $ -- $ --
Noninterest income $ 875 $ 566 $ 497 $ 568 $ 716
Noninterest expense $ 2,471 $ 2,478 $ 2,688 $ 2,767 $ 2,920
Net income (loss) $ 612 $ 3,798 $ 470 $ 454 $ 404
Per Share Data:
Net income (loss), basic $ 0.10 $ 0.65 $ 0.08 $ 0.08 $ 0.07
Net income (loss), diluted $ 0.10 $ 0.65 $ 0.08 $ 0.08 $ 0.07
Cash dividends declared $ -- $ -- $ -- $ -- $ --
Book value $ 5.89 $ 5.79 $ 5.12 $ 5.04 $ 4.96
Tangible book value $ 5.89 $ 5.79 $ 5.12 $ 5.04 $ 4.96
Performance Ratios:
Return on average assets 0.79% 5.16% 0.65% 0.64% 0.56%
Return on average equity 7.12% 48.09% 6.28% 6.18% 5.57%
Net interest margin, taxable equivalent 4.19% 4.29% 4.35% 4.24% 4.16%
Average cost of funds 0.22% 0.22% 0.24% 0.27% 0.33%
Average yield on loans 5.31% 5.18% 5.50% 5.23% 5.68%
Efficiency ratio 67.37% 75.41% 82.00% 85.90% 87.85%
Non-interest income to total revenue 23.85% 17.22% 15.16% 17.63% 21.54%
Capital & Liquidity:
Total equity to total assets (EOP) 10.88% 11.25% 10.32% 10.28% 10.16%
Tangible equity to tangible assets 10.88% 11.25% 10.32% 10.28% 10.16%
Total loans to total deposits 73.44% 77.36% 76.17% 79.45% 78.31%
Mohave State Bank
Tier 1 leverage ratio 10.34% 10.72% 10.52% 10.50% 10.20%
Tier 1 risk based capital 13.49% 13.23% 13.66% 13.33% 13.17%
Total risk based capital 14.75% 14.47% 14.91% 14.58% 14.42%
Asset Quality:
Gross charge-offs $ -- $ 1,045 $ 110 $ 50 $ 65
Net charge-offs (NCOs) $ (19) $ 1,025 $ 45 $ (115) $ 62
NCO to average loans, annualized -0.04% 2.01% 0.09% -0.23% 0.13%
Non-accrual loans/securities $ 5,975 $ 6,147 $ 8,617 $ 10,968 $ 9,924
Other real estate owned $ 11,268 $ 11,693 $ 12,196 $ 12,465 $ 14,386
Repossessed assets $ -- $ -- $ -- $ -- $ --
Non-performing assets (NPAs) $ 17,243 $ 17,840 $ 20,813 $ 23,433 $ 24,310
NPAs to total assets 5.43% 5.91% 7.14% 8.14% 8.48%
Loans >90 days past due $ -- $ -- $ -- $ 39 $ --
NPAs + 90 days past due $ 17,243 $ 17,840 $ 20,813 $ 23,472 $ 24,310
NPAs + loans 90 days past due to total assets 5.43% 5.91% 7.14% 8.15% 8.48%
Allowance for loan losses to total loans 1.57% 1.44% 1.90% 1.81% 1.78%
Allowance for loan losses to NPAs 18.52% 16.39% 17.77% 15.47% 14.44%
Period End Balances:
Assets $ 317,648 $ 301,877 $ 291,419 $ 287,857 $ 286,625
Total Loans (before reserves) $ 203,209 $ 202,897 $ 194,789 $ 200,220 $ 196,888
Deposits $ 276,716 $ 262,275 $ 255,722 $ 252,004 $ 251,426
Stockholders' equity $ 34,575 $ 33,961 $ 30,065 $ 29,584 $ 29,120
Common stock market capitalization $ 27,991 $ 30,396 $ 32,274 $ 26,113 $ 20,538
Full-time equivalent employees 80 76 75 77 80
Shares outstanding 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Average Balances:
Assets $ 309,367 $ 294,282 $ 288,913 $ 284,506 $ 287,844
Earning assets $ 273,449 $ 260,383 $ 255,530 $ 250,250 $ 251,041
Total Loans (before reserves) $ 205,025 $ 203,858 $ 198,953 $ 202,641 $ 193,317
Deposits $ 269,083 $ 257,282 $ 252,563 $ 248,511 $ 253,239
Other borrowings $ 4,737 $ 4,547 $ 5,584 $ 5,642 $ 4,719
Stockholders' equity $ 34,365 $ 31,592 $ 29,951 $ 29,395 $ 29,008
Shares outstanding, basic - wtd 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Shares outstanding, diluted - wtd 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
State Bank Corp.
Balance Sheets
Dollars in thousands - Unaudited 9/30/2014 12/31/2013
Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 1,954 $ 1,634
Interest bearing deposits 3,958 3,360
Overnight Funds 37,900 24,395
Held for maturity securities 30 37
Available for sale securities 36,541 27,420
Total cash and securities 80,383 56,846
Loans held for sale, before reserves 2,825 2,554
Gross loans held for investment 202,414 199,444
Loan loss reserve (3,193) (3,624)
Total net loans 202,046 198,374
Premises and equipment, net 9,906 10,107
Other real estate owned 11,268 12,465
Federal Home Loan Bank and other stock 1,917 1,268
Company owned life insurance 5,830 5,709
Other assets 6,298 3,088
Total Assets $ 317,648 $ 287,857
Liabilities
Non interest bearing demand $ 63,772 $ 58,822
Money market, NOW and savings 150,553 132,082
Time deposits <$100K 31,041 27,599
Time deposits >$100K 31,350 33,501
Total Deposits 276,716 252,004
Securities sold under repurchase agreements 4,240 4,864
Federal Home Loan Bank advances -- --
Subordinated debt 675 675
Total Debt 4,915 5,539
Other Liabilities 1,442 730
Total Liabilities 283,073 258,273
Shareholders' Equity
Common stock 25,037 25,037
Accumulated retained earnings 9,349 4,470
Accumulated other comprehensive income 189 77
Total shareholders equity 34,575 29,584
Total liabilities and shareholders' equity $ 317,648 $ 287,857
State Bank Corp.
Statement of Operations
For the Quarter Ended Year to Date
Dollars in thousands - Unaudited 9/30/2014 9/30/2013 9/30/2014 9/30/2013
Statements of Operations
Interest income
Loans, including fees $ 2,723 $ 2,647 $ 8,098 $ 8,089
Securities 205 155 604 469
Fed funds and other 18 18 44 53
Total interest income 2,946 2,820 8,746 8,611
Interest expense
Deposits 139 198 411 682
Borrowings 14 14 42 43
Total interest expense 153 212 453 725
Net interest income 2,793 2,608 8,293 7,886
Provision for loan losses 250 -- 620 225
Net interest income after loan loss provision 2,543 2,608 7,673 7,661
Noninterest income
Service charges on deposits 104 106 312 308
Mortgage loan fees 113 113 282 347
Gain on sale of loans 510 231 833 775
(Loss)/Gain on securities -- -- (42) 33
Other income 148 266 553 751
Total noninterest income 875 716 1,938 2,214
Noninterest expense
Salaries and employee benefits 1,315 1,288 3,923 3,886
Net occupancy expense 97 109 283 281
Equipment expense 39 39 115 126
Data processing 276 278 797 830
Director fees & expenses 41 55 140 151
Insurance 29 65 89 198
Marketing & promotion 82 153 250 378
Professional fees 97 128 399 301
Office expense 30 27 81 86
Regulatory assessments 69 163 330 478
OREO and repossessed assets 247 535 788 1,801
Other expenses 149 80 442 274
Total noninterest expense 2,471 2,920 7,637 8,790
Income (loss) before provision (benefit) for income taxes 947 404 1,974 1,085
Provision (benefit) for income taxes 335 -- (2,905) --
Net Income (Loss) $ 612 $ 404 $ 4,879 $ 1,085
Per Share Data
Basic EPS $ 0.10 $ 0.07 $ 0.83 $ 0.18
Diluted EPS $ 0.10 $ 0.07 $ 0.83 $ 0.18
Average shares outstanding
Basic 5,868,038 5,868,038 5,868,038 5,868,038
Effect of dilutive shares -- -- -- --
Diluted 5,868,038 5,868,038 5,868,038 5,868,038

CONTACT: Brian M. Riley, President & CEO Craig Wenner, EVP/Chief Financial Officer Phone: (928) 855-0000

Source:State Bank Corp.